NASHVILLE – The Tennessee Department of Commerce & Insurance’s (“TDCI”) Division of Securities is joining the North American Securities Administrators Association (“NASAA”) to recommend that investors use caution when considering advice from social media financial influencers, or “finfluencers.”
A finfluencer is a person who, by virtue of their popular or cultural status, has the capability to influence the financial decision-making process of others through promotions or recommendations on social media, according to a recent NASAA Informed Investor Advisory. These finfluencers may seek to influence potential investors by publishing posts or videos to their social media accounts, often stylized to be entertaining so that the post or video will be shared with other potential investors.
“While some popular online financial advisors may be offering sound investment advice via social media or other means, Tennessee investors would be wise to consider the source of any unsolicited financial advice and treat any decision with careful consideration before making an investment,” said TDCI Commissioner Carter Lawrence.
The advisory includes information to help investors better understand how influencers operate, what to consider when coming across financial advice on social media and where to go for help with concerns about a possible finfluencer. The advisory also points out red flags to consider including dubious advice, unverifiable or outdated financial credentials or investment recommendations not backed up by accurate data.
“The main thing to remember is that before making any financial decisions about your money, ask questions and make sure you understand the risks. Before you invest check the registration status of the person at BrokerCheck and the investment with us,” said TDCI Assistant Commissioner Elizabeth Bowling.